NAREDCO takes the real estate sector’s revival story to foreign investors; Calls for foreign investments for the post COVID growth
Zero – Stamp duty pushed Mumbai’s residential realty sales by 300% from August 2020 to October 2020
USD 8 Billion capital inflows expected in the Indian realty sector in the next fiscal; Residential, Commercial, Logistics, Data Centres to receive a major capital boost
MUMBAI: Bringing back the homebuyers into the State’s residential real estate sector, NAREDCO Maharashtra has announced yet another spell of zero- stamp duty on housing sales until 31st December 2020. The decision will allow more homebuyers to buy affordable and luxury residential properties at the lowest ever prices during the pandemic. Over 1,000 NAREDCO Maharashtra members have offered their properties for sale under this scheme.
Buoyed with a demand upsurge that pushed the housing sales in Mumbai and Pune to top the national sales charts with a share of 41 percent, NAREDCO Maharashtra is eyeing a similar kind of growth in the residential segment by 31st December due to the developer–borne stamp duty waiver. NAREDCO informed that the zero-stamp duty pushed Mumbai’s residential realty sales by 300 percent from August 2020 to October 2020. The trade body also expects a major policy upheaval like the affordable rental policy of the Government, the proposed Housing Policy of the Maharashtra State, and the Finance Minister’s announcement providing tax relief to both the developers and homebuyers with respect to the relaxations granted under the Section 43 (CA) and Section 56 (2)(X) of the Income Tax Act. These policies together will play a major role in shaping up the demand.
With a sharp demand correction over the pre – COVID levels, the apex body of developers is now eyeing to tighten the liquidity for the sector’s growth by calling upon foreign investors to invest in eligible projects. Supported by a solid ‘thrive – back’ story of the sector during the pandemic, the Government’s pro-industry reforms and euphoric realty buying sentiments in the country, the trade body is set to pitch for funding with the foreign investors in a three–day virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020’ that will begin from 25th November, 2020.
Mr Ashok Mohanani, President, NAREDCO Maharashtra announced the event at the Press Conference today. The event is organized jointly by NAREDCO and Asia Pacific Real Estate Association (APREA), a leading pan Asian trade association with a focus on cross-border real estate investment, and promotion of real estate as a preferred investment asset class across Asia Pacific and beyond. Anarock will be the knowledge partner for the event. The theme of the Summit is ‘India – Opportunities in the Coming Year’. It will bring the developers, the foreign investors and the policy makers on one platform to boost investments in the Indian Real Estate and Housing sector.
Announcing the decision of a zero – stamp duty until 31st December and the proposed Summit, Mr. Ashok Mohanani, President, NAREDCO Maharashtra said, “It’s a win-win for both the homebuyers and the developers, as the zero-stamp duty window will bring more homebuyers of Maharashtra into the buying net. It will not only push the housing sales trajectory; but also send positive signals to the foreign investors to accelerate their investment plans into the sector flushing more liquidity to tighten the supply side. With aggressive measures such as the stamp duty waiver, the launch of the HousingForAll portal, ease-of-doing-business climate, the foreign investors will start investing heavily in A-Graded income generating asset–classes; where Maharashtra’s real estate space will remain at the center.”
NAREDCO has pegged a substantial amount of foreign investment flows into the Indian real estate sector in the next two years. The trade body is expecting a strong action by the foreign investors in the ensuing period and expects major foreign funds like Blackstone, Brookfield, GIC, Xander, Ascendas, CPPIB, Warburg Pincus and Goldman Sachs expanding their investments into the sector. The Summit partner Anarock predicted USD 8 Billion capital inflows in Indian realty sector in the next fiscal. The capital will be pumped in various asset classes across Residential, Commercial, Logistics, Data Centres, etc.
APREA believes the market capitalization for the Asia Pacific (APAC) real estate markets has grown over 400% in the last 15 years and have outperformed the broader markets in the past 20 years with increasing participation from institutional investors. Over 50% investments in India are in real estate and the sector is expected to reach a 1 trillion USD mark in the next few years. The Institutionalisation is expected to continue.
Mr. Rajan Bandelkar, Vice Chairman, NAREDCO Maharashtra said, “The zero stamp duty intervention set the precedence and boosted the entire sector in a growth model. It ensured a quick inventory turnover and the trend will continue in the long-run. The next fiscal will see more liquidity with the foreign investors coming in action.”
Mr. Sandeep Runwal, President-Elect, NAREDCO Maharashtra said, “The bullish foreign funds will provide clean funds to the developers to expand their operations. This will help complete projects and bring a level–playing field among the organized developers. The lower tax regime has given volumes without impacting the Government’s revenues.”
Ms. Sigrid Zialcita, CEO, Asia Pacific Real Estate Association (APREA) said, “We expect the region’s real estate investments to rebound and to register inflows of over USD 660 billion next year with China and India remaining the region’s top emerging markets. This regains most of the ground lost in 2020, as conducive financing conditions, pent-up demand as deal-making restarts, and the rollout of successful vaccine headlines the recovery. We at APREA have incessantly endeavored to raise awareness amongst the investors, across all our APAC chapters including India. India real estate sector is set to attract Institutional Investments underpinned by fast urbanization, favorable regulatory norms, and high demand for residential and office premises across India.”
Mr. Shobhit Agarwal, Managing Director, and CEO of Anarock Capital Advisors said, “Decentralisation is the theme that is going to get prominence in real estate; not just in India but across the world. The ongoing pandemic has taught us that proximity to home is more important than the scale of it. Be it offices, Medicare, hospitality, or warehousing; companies will start focusing on decentralizing the facilities rather than having the mega centralized facility.”
The Summit will be graced by dignitaries like Shri Hardeep Singh Puri, Minister of State (Independent Charge) of the Ministry of Housing and Urban Affairs; Shri Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs, Government of India; Mr. Keki Mistry, Vice Chairman, HDFC Ltd; Ms. Sigrid Zialcita, CEO, APREA.
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